Indian markets are expected to open on a cautious note on Tuesday, as Russia-Ukraine tension further escalated following the Russian President Vladimir Putin's tough stance, recognising Luhansk & Donetsk regions as separate Republics from Ukraine. Putin says Ukraine is an integral part of our history.
Nikkei down 2%
However, global markets are somewhat stable despite rigid posturing by the Russian President. However, Japan's Nikkei and Hong Kong's Hang Seng are down nearly two per cent. Most of the other Asia-Pacific stocks are down around one per cent, signalling support at the bottom level.
Global media widely reports that an emergency UNSC meeting will soon start discussing Ukraine-Russia issue.
SGX Nifty at 17,073 indicates that Nifty is expected to see a gap-down opening of 150 points, as Nifty futures on Monday closed at 17,205.80.
‘Small caps to suffer most’
Analysts say that though the benchmark indices may see some semblance of support, larger markets in mid and small-cap space will continue to see heavy selling. Experts caution investors and traders not to adopt a buy-on-dips strategy in mid/small-cap space.
Analysts expect volatility to continue in the near term, given several headwinds. As foreign portfolio investors continue selling, Indian markets are unlikely to see recovery anytime soon.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd said: "We don’t expect the volatility to cool down until the geo-political issues are resolved. Further issues like Inflation, FIIs selling and upcoming Fed rate hike could add to the volatility in the near term."
Prashanth Tapse, Vice President (Research), Mehta Equities, said: from a chartist standpoint, the technical landscape will improve considerably only above Nifty 17807 mark. "For Tuesday’s trade, until Nifty’s 17421 mark is resistance, volatility will be hallmark and the perma-bulls should strictly not assume any intraday strength as light at the end of the tunnel. Expect waterfall of selling below Nifty 17057 mark," he cautioned.